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There are a couple of good parts about this post. The first is the HN comments, which are an unintentional fountain of hilarity. But the second is the assumpt

There are a couple of good parts about this post. The first is the HN comments, which are an unintentional fountain of hilarity. But the second is the assumptions. 50% of the US population can't afford to put even a dollar into any sort of investment security. Of the 50% of the public that does own some sort of security, most of them are in the three-figures range. This index card, without realizing it at all, has targeted itself towards the top 10% of the population: people who have jobs with 401Ks, people for whom Roth IRAs will be useful. In other words, if you are well into being one of the richest people in the richest country in the world, here you go - save 20% of your income, and so on. And you'll be fine! So I'm just curious: suppose you aren't?

leokun 13y ago
The promote social insurance programs line comes in maybe.
VikingCoder 13y ago
I agree, but it is potentially useful to that demographic. If we made this two or three standard deviations more exclusive, the financial advice could be: Be born wealthy. Don't borrow against your trust fund.
tptacek 13y ago
The top 10th percentile of earners in US are barely even eligible to use Roth IRAs, which have gross income participation limits.
- jcdavis 13y ago
  One can do a backdoor Roth conversion to get around that limit. (but you need to have no money in regular pretax IRAs to do so)
  - elasticdog 13y ago
    Well, you can have money in there...it would just be a taxable event when you do the conversion to a Roth, so you have to keep in mind that your taxable income will go up by the amount that you did not have a "basis" in.
wdr1 13y ago
Honestly, when it did become so evil to give honest, practical advice to the middle class? The wealthy have been sufficiently vilified that we now have to crucify those not born into money, bu starting to do okay? This was a very reasonable & practical post with good advice for those starting to come into money. Why is that so bad? That type of advice can't be dispensed without a holistic social program? That's total bullshit.
- kjs3 13y ago
  Get over yourself. What is total bullshit is entitled twats like you mentally rewriting the article so it's not "all the financial advice you’ll ever need" as claimed but "all the financial advice you’ll ever need if you're in the minority and an up and coming middle class wage earner who has sufficient disposable income to act on the advice".
  - deleted 13y ago
    [deleted]
    - kjs3 13y ago
      Are you really trying to equate cost of living and saving rate in the US vs China with a straight face? I got nothing.
derefr 13y ago
If you fall below those limits, do you really need "financial advice?" If you're making below, say, $60k/yr -- and you're still young enough that what you do with your long-term investments can serve to multiply your returns -- then what you probably need is not financial advice, but bootstrapping advice. Starting with "go to school for STEM--or finance, if you can."
briancaw2 13y ago
It says it has all the financial advice you could ever need, not all the advice you need right now. Poor people: save money and pay off credit card debts. Middle Income And Above: do that + other rules. And saying poor people couldn't save even a dollar is nonsense. Poor people are not 100% optimal in their spending and financial matters - often quite the opposite. Furthermore, poverty is often something people grow out of (the poor skew young), and this has some good advice for doing that faster. Stop making a useful article out to be some elitist hogwash.
- dragonwriter 13y ago
  > Poor people: save money and pay off credit card debts. So, "poor people, get surplus income". Or, equivalently, "poor people, stop being poor". > And saying poor people couldn't save even a dollar is nonsense. If you can reliably meet the requirements of life without charity or depletion of reserves, you arguably aren't meaningfully poor. Poor people can save sometimes, but that's mostly saving a reserve for the bad times that will come (usually fairly soon and frequently), not net savings over the long term.
  - briancaw2 13y ago
    No. Poor people cut out non-essentials, be more efficient, and save money. A lack of nice things now will help later. Buy cheaper clothes, stop smoking, stop drinking, eat out less, don't have a fancy car...etc. Don't live beyond your means and consider your means what allows you to save 20%. Exactly what I'd have to do if I wanted to save more money. Stop pretending like poor people are all dizzy starving idiots that can't do a damn thing to better their condition. People tend to live up to their expectations.
    - dragonwriter 13y ago
      > No. Poor people cut out non-essentials, be more efficient, and save money. If you have surplus income after paying for essentials, you aren't poor.
jamesaguilar 13y ago
The last line of the card is for those who aren't. Otherwise, they need to grow their income, because nothing you do is going to fix the problem if you are making 15k per year.
- kjs3 13y ago
  "they need to grow their income" Hey lazy poor people, work harder. Got it.
mechanical_fish 13y ago
The percentage of US workers with access to a retirement-benefits plan is 71%. 57% of all US workers participate in such a plan. (Source: U.S. Bureau of Labor Statistics, 2009 National Compensation Survey, http://www.bls.gov/ncs/ebs/benefits/2009/ebbl0044.pdf http://www.bls.gov/ncs/ebs/benefits/2009/ebbl0044.pdf) In Table 2, it says that even 15% of the lowest income decile - people making less than 90% of workers - find a way to participate in a retirement plan. Here's a more detailed writeup from the Bureau: http://www.bls.gov/opub/cwc/cm20100520ar01p1.htm http://www.bls.gov/opub/cwc/cm20100520ar01p1.htm Meanwhile, the "top 10%" of households earn $135k per year or more, while the median income is around $50k. (Source: http://www.economist.com/blogs/dailychart/2011/09/us-household-income http://www.economist.com/blogs/dailychart/2011/09/us-househo...) Anyone making over $60k per year could (in theory; this is a highly abstract argument at this level, of course!) save 20% of their income without dropping below the median household income of $50k; households making over $60k per year appear to constitute 32% to 40% of the population, if I read this Census Bureau chart correctly: https://www.census.gov/compendia/statab/2012/tables/12s0690.pdf https://www.census.gov/compendia/statab/2012/tables/12s0690.... None of which says anything about the effectiveness of 401k plans, or anything else. But if you're going to handwave about numbers it's nice to hit the right order of magnitude.
- thesz 13y ago
  20% of $60K is 12K. Or, put another way, 80% of $60K is $48K. $48K is below $50K. Your math is wrong.
- lutusp 13y ago
  > Anyone making over $60k per year could [...] save 20% of their income without dropping below the median household income of $50k. 20% of 60k is 12k, 60k - 12k = 48k. So no, the claim isn't true for the most trivial of reasons.
  - pathy 13y ago
    Nitpicking, 48k is close enough for the point to still be valid. You are technically correct though.
jrkotrla 13y ago
you are wrong. I was saving money in an IRA when I had a salary of 25k. 2011 Median income was $50k. That may not be much in the SFO and ATX and LGA's that HN populates, but for the majority of the country where the majority of the population lives, that is a good salary. I know that HN is full of tech people who think that six figures is slumming in SFO, but you are desperately out of touch with reality. If a family of five (my dad, mom, and us kids in the 80's) can set aside money money on $22k a year, then the median family at $50k can set aside money in 2013.
ajuc 13y ago
You have food stamps, cheap oil and electricity, unemployement smaller than 10%, and if you are homeless you can move to a state that doesn't have winters capable of killing you. People in Eastern Europe save money and 50% of Americans can't?
- MacsHeadroom 13y ago
  41% of working age Americans are jobless. The official unemployment calculation is a joke.
  - idProQuo 13y ago
    Whoa, we're gonna need a source for that kind of fact.
  - pinaceae 13y ago
    there would be civil war if this were remotely true. ever think about those "facts" for a second?
    - humanrebar 13y ago
      He's probably referring to the employment rate, which was 66.6% in 2011 according to OECD numbers: http://en.wikipedia.org/wiki/Employment_rate http://en.wikipedia.org/wiki/Employment_rate
prawn 13y ago
Budget to save before you outlay your discretionary income. You might have to redefine discretionary to include car (if public transport suffices for your job), cable, etc. Don't lay out your budget and set aside $x for entertainment (eating out, etc). Savings will always suffer. Set aside desired savings first and then work with what's left.
- BrandonMarc 13y ago
  Hear hear. I can't repeat this point enough. You have to force yourself to save, first. If you spend on everything else first and figure you'll save "the rest", something will always come up. If you set it aside before other categories, it will ... be set aside! As a corollary, just writing (and following) a basic budget does wonders. I've talked to a lot of people who said it was like getting a raise. You have regular expenses, so just plan out a basic month and then follow it. Something magic happens next: by being more conscious and deliberate about your spending, you spend less on un-necessary "wants" (if it's truly a need you'll spend it no matter what). Plus, a written budget is like looking in the mirror: it's a reflection of your priorities, good bad or indifferent. If you see you're spending $300 / month on restaurants and $0 / month saving for retirement ... well, that shows what appears to be important to you. And, if you've got two brain cells to rub together, it shows an easy place to make some adjustments. Not that I have anything against restaurants ... even $200 and $100 would be far more reasonable.
  - prawn 13y ago
    Another point is to never assume that getting a raise will solve your saving problem. It won't.

leokun 13y ago

The promote social insurance programs line comes in maybe.

VikingCoder 13y ago

I agree, but it is potentially useful to that demographic. If we made this two or three standard deviations more exclusive, the financial advice could be: Be born wealthy. Don't borrow against your trust fund.

tptacek 13y ago

The top 10th percentile of earners in US are barely even eligible to use Roth IRAs, which have gross income participation limits.

jcdavis 13y ago
One can do a backdoor Roth conversion to get around that limit. (but you need to have no money in regular pretax IRAs to do so)
- elasticdog 13y ago
  Well, you can have money in there...it would just be a taxable event when you do the conversion to a Roth, so you have to keep in mind that your taxable income will go up by the amount that you did not have a "basis" in.

wdr1 13y ago

Honestly, when it did become so evil to give honest, practical advice to the middle class? The wealthy have been sufficiently vilified that we now have to crucify those not born into money, bu starting to do okay? This was a very reasonable & practical post with good advice for those starting to come into money. Why is that so bad? That type of advice can't be dispensed without a holistic social program? That's total bullshit.

kjs3 13y ago
Get over yourself. What is total bullshit is entitled twats like you mentally rewriting the article so it's not "all the financial advice you’ll ever need" as claimed but "all the financial advice you’ll ever need if you're in the minority and an up and coming middle class wage earner who has sufficient disposable income to act on the advice".
- deleted 13y ago
  [deleted]
  - kjs3 13y ago
    Are you really trying to equate cost of living and saving rate in the US vs China with a straight face? I got nothing.

derefr 13y ago

If you fall below those limits, do you really need "financial advice?" If you're making below, say, $60k/yr -- and you're still young enough that what you do with your long-term investments can serve to multiply your returns -- then what you probably need is not financial advice, but bootstrapping advice. Starting with "go to school for STEM--or finance, if you can."

briancaw2 13y ago

It says it has all the financial advice you could ever need, not all the advice you need right now. Poor people: save money and pay off credit card debts. Middle Income And Above: do that + other rules. And saying poor people couldn't save even a dollar is nonsense. Poor people are not 100% optimal in their spending and financial matters - often quite the opposite. Furthermore, poverty is often something people grow out of (the poor skew young), and this has some good advice for doing that faster. Stop making a useful article out to be some elitist hogwash.

dragonwriter 13y ago
> Poor people: save money and pay off credit card debts. So, "poor people, get surplus income". Or, equivalently, "poor people, stop being poor". > And saying poor people couldn't save even a dollar is nonsense. If you can reliably meet the requirements of life without charity or depletion of reserves, you arguably aren't meaningfully poor. Poor people can save sometimes, but that's mostly saving a reserve for the bad times that will come (usually fairly soon and frequently), not net savings over the long term.
- briancaw2 13y ago
  No. Poor people cut out non-essentials, be more efficient, and save money. A lack of nice things now will help later. Buy cheaper clothes, stop smoking, stop drinking, eat out less, don't have a fancy car...etc. Don't live beyond your means and consider your means what allows you to save 20%. Exactly what I'd have to do if I wanted to save more money. Stop pretending like poor people are all dizzy starving idiots that can't do a damn thing to better their condition. People tend to live up to their expectations.
  - dragonwriter 13y ago
    > No. Poor people cut out non-essentials, be more efficient, and save money. If you have surplus income after paying for essentials, you aren't poor.

jamesaguilar 13y ago

The last line of the card is for those who aren't. Otherwise, they need to grow their income, because nothing you do is going to fix the problem if you are making 15k per year.

kjs3 13y ago
"they need to grow their income" Hey lazy poor people, work harder. Got it.

mechanical_fish 13y ago

The percentage of US workers with access to a retirement-benefits plan is 71%. 57% of all US workers participate in such a plan. (Source: U.S. Bureau of Labor Statistics, 2009 National Compensation Survey, http://www.bls.gov/ncs/ebs/benefits/2009/ebbl0044.pdf http://www.bls.gov/ncs/ebs/benefits/2009/ebbl0044.pdf) In Table 2, it says that even 15% of the lowest income decile - people making less than 90% of workers - find a way to participate in a retirement plan. Here's a more detailed writeup from the Bureau: http://www.bls.gov/opub/cwc/cm20100520ar01p1.htm http://www.bls.gov/opub/cwc/cm20100520ar01p1.htm Meanwhile, the "top 10%" of households earn $135k per year or more, while the median income is around $50k. (Source: http://www.economist.com/blogs/dailychart/2011/09/us-household-income http://www.economist.com/blogs/dailychart/2011/09/us-househo...) Anyone making over $60k per year could (in theory; this is a highly abstract argument at this level, of course!) save 20% of their income without dropping below the median household income of $50k; households making over $60k per year appear to constitute 32% to 40% of the population, if I read this Census Bureau chart correctly: https://www.census.gov/compendia/statab/2012/tables/12s0690.pdf https://www.census.gov/compendia/statab/2012/tables/12s0690.... None of which says anything about the effectiveness of 401k plans, or anything else. But if you're going to handwave about numbers it's nice to hit the right order of magnitude.

thesz 13y ago
20% of $60K is 12K. Or, put another way, 80% of $60K is $48K. $48K is below $50K. Your math is wrong.
lutusp 13y ago
> Anyone making over $60k per year could [...] save 20% of their income without dropping below the median household income of $50k. 20% of 60k is 12k, 60k - 12k = 48k. So no, the claim isn't true for the most trivial of reasons.
- pathy 13y ago
  Nitpicking, 48k is close enough for the point to still be valid. You are technically correct though.

jrkotrla 13y ago

you are wrong. I was saving money in an IRA when I had a salary of 25k. 2011 Median income was $50k. That may not be much in the SFO and ATX and LGA's that HN populates, but for the majority of the country where the majority of the population lives, that is a good salary. I know that HN is full of tech people who think that six figures is slumming in SFO, but you are desperately out of touch with reality. If a family of five (my dad, mom, and us kids in the 80's) can set aside money money on $22k a year, then the median family at $50k can set aside money in 2013.

ajuc 13y ago

You have food stamps, cheap oil and electricity, unemployement smaller than 10%, and if you are homeless you can move to a state that doesn't have winters capable of killing you. People in Eastern Europe save money and 50% of Americans can't?

MacsHeadroom 13y ago
41% of working age Americans are jobless. The official unemployment calculation is a joke.
- idProQuo 13y ago
  Whoa, we're gonna need a source for that kind of fact.
- pinaceae 13y ago
  there would be civil war if this were remotely true. ever think about those "facts" for a second?
  - humanrebar 13y ago
    He's probably referring to the employment rate, which was 66.6% in 2011 according to OECD numbers: http://en.wikipedia.org/wiki/Employment_rate http://en.wikipedia.org/wiki/Employment_rate

prawn 13y ago

Budget to save before you outlay your discretionary income. You might have to redefine discretionary to include car (if public transport suffices for your job), cable, etc. Don't lay out your budget and set aside $x for entertainment (eating out, etc). Savings will always suffer. Set aside desired savings first and then work with what's left.

BrandonMarc 13y ago
Hear hear. I can't repeat this point enough. You have to force yourself to save, first. If you spend on everything else first and figure you'll save "the rest", something will always come up. If you set it aside before other categories, it will ... be set aside! As a corollary, just writing (and following) a basic budget does wonders. I've talked to a lot of people who said it was like getting a raise. You have regular expenses, so just plan out a basic month and then follow it. Something magic happens next: by being more conscious and deliberate about your spending, you spend less on un-necessary "wants" (if it's truly a need you'll spend it no matter what). Plus, a written budget is like looking in the mirror: it's a reflection of your priorities, good bad or indifferent. If you see you're spending $300 / month on restaurants and $0 / month saving for retirement ... well, that shows what appears to be important to you. And, if you've got two brain cells to rub together, it shows an easy place to make some adjustments. Not that I have anything against restaurants ... even $200 and $100 would be far more reasonable.
- prawn 13y ago
  Another point is to never assume that getting a raise will solve your saving problem. It won't.